FINRA Rule 3120

The supervisory control system must:

• test and verify that the supervisory procedures are reasonably designed to achieve compliance with applicable laws and regulations
• create or amend supervisory procedures where a need for change is uncovered by testing
• require the submission of an annual report:
  • detailing the system of supervisory controls in place
  • including the summary of test results
  • identifying significant identified exceptions in those results
  • highlighting additional or amended supervisory procedures created in response to the results

For firms reporting $200m or more in gross revenues in calendar year (n) a report in calendar year (n+1) must be submitted to senior management, which must include, for year (n):

1. a tabulation of reports pertaining to customer complaints and internal investigations made to FINRA
2. a discussion of the compliance efforts including procedures and educational programs in:
   1. trading and market activities
   2. investment banking activities
   3. antifraud and sales practices
   4. finance and operations
   5. supervision
   6. anti-money laundering